Aramark Holdings (ARMK)

Fixed asset turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Revenue	US$ in thousands	19,257,800	15,941,600	11,818,400	12,437,600	16,025,900
Property, plant and equipment	US$ in thousands	1,425,970	2,032,040	2,038,390	2,050,900	2,181,800
Fixed asset turnover		13.51	7.85	5.80	6.06	7.35

September 30, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $19,257,800K ÷ $1,425,970K
= 13.51

Fixed asset turnover is a financial ratio that measures a company's ability to generate revenue from its investments in fixed assets. Aramark Holdings' fixed asset turnover has shown a fluctuating trend over the past five years. The ratio increased from 7.35 in 2019 to 13.51 in 2023, indicating that the company was able to generate $13.51 in revenue for every dollar invested in fixed assets in 2023.

This significant increase in fixed asset turnover suggests that Aramark Holdings has become more efficient in utilizing its fixed assets to generate sales over the years. It could be attributed to improvements in operational efficiency, better asset management, or increased demand for its services.

However, it's important to note that a very high fixed asset turnover ratio may also indicate that the company is operating with too few assets, which could potentially limit its growth prospects or lead to operational challenges in the future. Therefore, it's crucial for Aramark Holdings to maintain a balance between asset utilization and long-term growth strategies.